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With growth and productivity high on the political agenda worldwide, international interest in AI has exploded. The race for AI supremacy is in full swing. For many nations, taking the lead on AI has become a strategic objective.
To get ahead in the race for AI supremacy, governments must ensure the right infrastructure is in place to grasp this opportunity and be part of the growth agenda. Data center growth has been steadily building for years alongside digital adoption, but AI has catapulted this demand to a new level. According to Gartner, spending on data center systems will increase by a quarter (24%) in 2024. AI-capable data centers are quickly becoming a key strategic resource, which is reflected in the $22bn of global investment in data centers in the first five months of 2024.
However, efforts by operators to grasp this opportunity are being hampered by an operational inertia that is making it difficult to adapt to a rapidly changing environment. This threatens to see operators miss out on exploiting this investment opportunity and being part of the growth agenda.
Nordic General Manager at Onnec.
Rising up the global government agenda
Data centers are key for the growth of global economies in the AI gold rush. They provide the critical IT infrastructure that will power the AI revolution, enabling governments to ride the wave of AI to supercharge economic growth and productivity.
The UK is one such country which has recognized data centers as being a critical component in boosting the UK’s AI sector. In early 2024, the UK government announced it would remove planning barriers to new data centers and designate projects as “nationally important”. This has seen plans for two rejected data centers revisited, and the UK government now declare data centers powering the economy be designated as Critical National Infrastructure, providing protections from cyber criminals and IT blackouts.
Across the Irish Sea, Ireland is set to generate more than €4.5 billion in inward data center investment by 2025. This is being driven by the Irish government’s position on the importance of data centers to the economy and attracting investment. Ireland has recently revised these statements to ensure sites adhere to new green principles.
In mainland Europe, the German government has said that data centres are, “the lifeline of the digitalised world.” While Berlin’s regional government, “understands the importance of data centres to the region”. Before its hung parliament, the French government was seeking to pass a law allowing large data centres to be classified as projects of major national interest, part of a push to expand an industry it sees as the backbone of the digital economy. Meanwhile, in growing regions like Norway, the Norwegian data center strategy 2.0 makes it easier to establish data centers and outlines better ways to manage resource utilization of waste heat from data centers.
The roadblocks to data center growth
The demand for data centers is skyrocketing due to the high compute power needs of AI, creating huge growth and opportunities for operators. But many operators are being held back by an operational inertia that prevents them from adapting to a rapidly evolving environment. This inertia can be broken down into 5 barriers that limit interchangeability or an operator’s ability to adapt:
1. Power access continues to be a problem: A power shortage is inhibiting the global data center markets growth. AI-compute requires high-performance processors (GPUs & DPUs) that draw more power than traditional CPUs. Gaining access to power requires a lot of planning, and operators must consider this in choosing development sites to avoid costly delays.
2. ESG concerns continue to dominate the agenda: Data center teams are under pressure to accurately measure and report on supply chain sustainability. Demand for digital services will create more compute intensity, challenging the cooling and power capabilities of sites, significantly impacting their ability to achieve ESG goals. Failure to address ESG concerns risks operators falling behind sustainability legislation, causing delays.
3. Finding and retaining talent: 53% of operators face difficulty finding qualified candidates, whilst 42% have difficulty retaining staff. Operators need to fill this gap with people familiar with data center operations, because sites are more than just the servers, or the water and power they consume. Without the right skills mix, data centers will be unable to cater to the growing demand facing them.
4. Supply chain disruption halts progress: 83% of operators have reported delays to projects due to global material shortages. Supply chains have become brittle, and short-staffed teams are spread too thin trying to manage supply chain problems such as material acquisition, shipping and production management. Operators must find ways to identify and mitigate these challenges or risk significant delays.
5. Health and safety is rising up the agenda: The speed of the development of data centers requires teams to fully understand the importance of health and safety procedures and processes and meet zero-incident policies. Failure to address concerns could lead to injuries that result in operational delays or financial penalties.
Data centers can’t handle growth and the political agenda alone
To overcome operational inertia, data center operators must take a more holistic approach to data center design and operations. Maintaining the right balance between all aspects of the data center – from the infrastructure impact of AI to skills, health and safety and sustainability. This includes building modular infrastructure where interchangeability and connectivity are foundational, creating flexible facilities that can adapt as demand or technologies change.
This approach allows operators to stay nimble, enabling them to seize the growth opportunity and navigate the corridors of power influencing data center growth.
But operators can’t do this alone – they need support. Strong partners can help to overcome roadblocks by helping to manage projects and providing vital expertise. This knowledge is critical in ensuring operators have support across all aspects of the data center. Strong partners can also provide a pipeline of talent and resources with which operators can successfully exploit the global data center investment opportunity and be a vital part of the growth agenda.
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